If the Mayweather vs. McGregor fight proved anything, it’s not that Las Vegas gaming stocks about to pop higher. It only proved that boxing is more of a sport than a UFC submission fight or other martial art. In martial arts you get your opponent on the floor by (almost) any means necessary. Boxing, on the other hand, is a more level test of balance, quickness, strength and endurance. As maddeningly arrogant as Floyd Mayweather is, an arrogance that now will never again be challenged in the boxing ring, at least he proved to the world that boxing is, in truth, a sport.

Floyd Mayweather had said that boxing’s reputation was on the line and he was right. Had he lost, it would have tarnished boxing’s legacy for a long time, perhaps permanently. On the one hand, many of us wanted to see him fall. On the other hand, it was probably best that he won. While Mayweather-Pacquiao was akin to Balboa-Creed, Mayweather-McGregor was more like the Rocky III exhibition stunt between Rocky and Hulk Hogan’s character Thunderlips.

Now, what do the once again record revenues tell us about the Las Vegas economy, the business cycle, and near-term investment options? The same thing that MGM’s latest 10Q tells us. There is a record amount of money available at the consumer level that is being spent more easily, while at the same time we look to be on the verge of a sharp downturn at the capital goods level.

Volumes at MGM have stagnated this last quarter, which is to be expected given that we are at a trough in dollar supply growth. This week will probably end up being the bottom for money supply expansion for the year, which means now is the most dangerous time of year to buy stocks.

According to the Las Vegas Convention and Visitors Authority, Las Vegas visitor volume decreased 1%, but Las Vegas Strip revenue per available room increased 5% and Strip gaming revenue increased 3% in the last two quarters compared to a year earlier. Essentially, less people are spending more money.

Table games drop for the last quarter decreased 3.6% from $905M to $872M though slot handle did increase 3.4%. Taken together there was a 1.7% increase in gambling volume in dollar terms despite a 1% drop in overall Las Vegas Strip visitors, numbers that are more or less consistent with a stagnating money supply.

The discrepancy between volumes and revenues gets even more obvious the deeper into the numbers you go. Despite the unimpressive volumes, casino revenue at MGM has skyrocketed. In the latest quarter, casino revenue has jumped 41%, while same-store casino revenue decreased 5%. MGM says this drop was due to a 20% decrease in same-store table games revenue. Indeed, less people are gambling more money. This is a troubling short-term signal. It doesn’t look like it will last very long, but it does help confirm that now is not the time to be putting more capital to work in Las Vegas gaming stocks. Now is the time to wait for a pullback.

The same pattern can be seen in Las Vegas operations at Las Vegas Sands. Gaming revenues are up nearly 20%, but table games drop is down 6.1% and slot handle is down 8.5%. Less people spending more money. It’s a similar story with Wynn. Total Las casino revenues are up 4.8%, but table drop is down 1.9%. Slot handle at Wynn is up though also by 1.9% so overall Wynn Las Vegas volumes are around breakeven in dollar terms, same as MGM. It does look likely though that the pattern of fewer people spending more money holds here as well.

Given the conflicting signals in Las Vegas set in terms of money supply, it looks likely that we are at the point where one catalyst could cause a major fall in stocks across the board. Whether it’s Trump being impeached or otherwise forced out of office, a global trade war starting, North Korea doing something crazy or anything else, at some point soon capital markets are going to break short term. Las Vegas stocks could be hit especially hard because many of the bellwethers like Wynn, Las Vegas Sands and MGM are heavily involved in Macau. Worsening trade relations with China could also affect business there, bringing these stocks down from that direction as well.

The good news though is that it does not look like a coming downturn, if it happens, will be drawn out. It will probably last a few months at most, followed by a strong rebound. There is always the slight chance that a severe downturn could be avoided, but even if it is, there is not enough money in the system right now to sustain a trend higher, at least not until October at the very earliest.

Aggressive traders can take small short positions here in Las Vegas stocks. Conservative traders can increase cash, though cash is a bit of a problem, too. The dollar looks like it is about to fall hard as long-term support levels in the dollar index look like they are about to broken. The 200-week moving average (red line below) was just breached in the dollar index yesterday for the first time since 2014, before the big dollar surge and oil collapse. Instead of strictly cash, capital preservation may better be accomplished through a short dollar fund such as UDN or a long Euro fund like FXE, which moves inversely to the dollar index. FXE would be preferable since it is more liquid.

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